Titan Medical (TSX:TMD) shares lost nearly half their value this morning after the medical device company suspended the timeline for its Sport robot-assisted surgery device.
Earlier this year the Toronto-based company pushed back the timeline for its 501(K) submission to the FDA from late this year to the first half of 2020. But late yesterday Titan withdrew all of its milestone targets after the fourth quarter because “its lack of financing has caused its primary product development supplier to limit the development work on the company’s robotic surgical system,” according to a press release.
The supplier also cut “a significant number” of employees and contractors who’d been working on the Sport program, and relations with a second supplier “deteriorated” after the supplier questioned Titan’s ability to pay its nearly $3 million tab and Titan “expressed dissatisfaction with the quality of the work performed.”
An Oct. 4 demand letter for the $2.9 million the supplier claims is owed was met with Titan’s Oct. 11 denial and a request that the unnamed supplier “cease all work on behalf of the company,” Titan said.
“These events will significantly impact the timing and costs associated with the completion of the company’s future milestones as additional time and cost will be incurred to rehire employees and resume product development,” according to the release.
Titan said it’s also looking to raise between $15 million and $25 million in a stock-and-warrants offering.
TMDI shares were down -47.7% to 56¢ apiece today in early trading.
